SEC Releases Statement on Protocol Staking Activities

The staff in the SEC’s Division of Corporation Finance (the “Division”) has released a statement to provide its views on certain protocol staking activities as part of its broader effort to clarify current regulations pertaining to crypto assets. Staking activities within the scope of the statement include those “that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network.” The Division staff expresses the view that protocol staking activities, as defined in the statement, are not subject to the Securities Act of 1933 for registration purposes because they “do not involve the offer or sale of securities” under Section 2(a)(1) of the act.

Also see the statements by SEC Commissioners Hester Peirce and Caroline Crenshaw.